Weekly Column

Ever since our startled ears heard the Prime Minister’s Press Secretary inviting various interest groups to bring their shopping lists and come to a meeting with her boss in advance of this year’s Budget, we began to wonder just how serious the Prime Minister is about managing our economy.

The formulation of a Budget as a tool for national development ought to be the expression of a Government’s vision for the kind of development it wishes for the nation and the pace at which that vision is to be implemented. Depending on external factors, it may also introduce measures that seek to protect the economy from forces that would otherwise impair the execution of that vision.

Given the importance of the budgetary process to national development, it should not therefore come as a surprise to learn that budgets are often many months in the crafting. A considerable amount of data gathering and research into the impact of both taxation and concessions goes on behind the scenes.

For almost ten years, the BLP-led public/private sector consultations have also become an important feature of preparing for the annual budgetary exercise. These consultations usually take place in September or October to allow sufficient time for the background analysis of information coming out of the discussions.

Coming to office as it did in mid-January of this year, the new Government did not have the luxury of convening a public/private sector consultation prior to preparing its Estimates of Expenditure for 2008/2009.

Given the strictures of the timetable imposed on it, the sensible and responsible action for the Minister of Finance in the circumstances would have been to convene a meeting with the social partners immediately after the Estimates Debate in order to allow for the proper analysis of possible concessions he may have been persuaded to grant to the productive sectors arising out of their discussions.

Mystifyingly, Mr. Thompson waited until the 17th of June to summon the social partners to a consultation – just three weeks before the presentation of his budgetary proposals. He then met with other special interest groups a week later – just ten days before the budget. But we think we know the reason for the belated scheduling of these meetings. In the two weeks prior to the consultation the IMF team was in Barbados. Listen to their advice to the Prime Minister “… the mission recommended a coordinated policy response, involving the government, the central bank, and the social partners to share the burden of a necessary adjustment.”

This sequence of events can only result in one of three things come Budget Day:

1. The Prime Minister will present measures arising from his discussions in the absence of sound economic analysis
2. His meetings were purely for public relations purposes and he has already determined the measures he will present
3. None of the above because he was simply adhering to the dictates of the IMF

On Monday afternoon the public will be able to determine which one is applicable.

One thing remains certain however, if Mr. Thompson were not so intent on attending every cockfight from Beijing to New York and back, alighting only long enough to tell us that we are in a crisis, he would have found more time to apply himself to the important matters of state that affect the pockets of every man, woman and child on this little rock.

But perhaps we are assuming too much and he really has no vision for the economy beyond taking the advice of the IMF and replacing local monopolies with their foreign counterparts, obsessed as he is with shopping lists.